Res 1993-185 - Laserfiche WebLink

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I bA 13 c. CHAMPUS During the fiscal year ended June 30, 1993, Debtor received approximately 44.9% of its revenues through CHAMPuS. The current method of reimbursement for acute psychiatric hospitals went into effect January 1989 and is based upon a predetermined per diem amount for each day of hospital care. The new reimbursement system identifies high-volume and low-volume hospitals. The low-volume hospitals are reimbursed based upon a regional rate and the high-volume hospitals are reimbursed based upon a hospital-specific rate not to exceed a cap of $647.00 per day. A high-volume hospital is a 'hospital that has had over 25 CHAMPUS discharges during the base year .or any future CHAMPUS fiscal year. Once a facility is designated as a high-volume hospital, it cannot be reclassified as a low-volume hospital. RTC reimbursement is currently between $434.00 and $477.00 per day for residential treatment centers. These rates are adjusted annually for inflationary factors. In October 1991, CHAMPUS began limiting covered inpatient services to 150 days for residential treatment: 30 days for acute adult, and 45 days for acute adolescent. Also, CHAMPUS is currently enrolling more CHAMPUS participants in programs that are overseen by local healthcare commanders. Debtor feels t;hat these types of limitations ultimately decrease the a.mo un t of net revenue from CHAMPUS and may have a material impact on the future operations of the Debtor. 2. Seasonal Variations in Business The uti li zation of Debtor's facility, and thus its . is subject revenues, to seasonal variations. In general, utilization is significantly reduced in December and January primarily because of the holiday season, and in the summer months, primarily because of the ad¡nission and discharge patterns of children and adolescents and the vacation schedules of physicians and other referral sources: 3. Competition The Debtor operates in a competitive environment. Competi bon for patients comes from alternative forms of treatment as well as from other hospitals and health care providers. In the delivery of psychiatric services, there are many treatment modalities, ranglng from outpatient counseling to inpatient treatment in a general hospital. Debtor's competitors, many of which have greater financial and other resources than Debtor, include government agencies and tax exempt and non-profit organizations. Increasing availability of services in active competition for patients in almost all markets will have an impact on Debtor' s future earnings. Debtor believes that its ability to compete successfully is enhanced by its reputation for hi gh-qua li ty clinical services, its quali ty medical and . - 27 - a-ZeISS